CLIENT MONEY IPT

Settling Your IPT Liabilities For You

Insurance Premium Tax (IPT) can be complex with fragmented rules and requirements levied by the many different tax authorities in the jurisdictions where this tax applies. This only adds to the challenges faced by finance teams when calculating and settling IPT accurately and on time.

Failure to do so can result in penalties, fines and unwelcome audits – all of which will have an adverse effect on profitability.

Unlike other IPT compliance service providers, at Sovos we provide a complete end-to-end service for our customers providing complete peace of mind and allowing them to focus on what they do best while leaving the IPT compliance to us. 

We not only produce and file IPT and parafiscal reports for our customers, but we also make the necessary payments and settle liabilities to the relevant tax authorities using cleared funds held in segregated client bank accounts.

We recognise that IPT is niche and not always a core function for finance teams which is why we offer a client money service for our IPT customers. The funds are held in a segregated bank account for our customers with reconciled statements being provided on a monthly basis.

A STREAMLINED PROCESS TO SETTLE IPT LIABILITIES

Based on data uploaded we let our customers know in advance the exact amount needed to settle each of their local IPT liabilities as they become due so there’s plenty of time to ensure the funds are available ahead of tax authority deadlines.

Once the funds have been received, we can then ensure the correct payments are made directly to the tax authorities in line with local legislation.

All receipts and payments with the segregated client bank accounts are reconciled with the submitted returns and monthly reports are provided.

COMPLIANCE PEACE OF MIND

  • No need to tackle IPT alone, lean on our expertise
  • Advance notice of IPT liabilities due
  • Flexible currency options in line with the reporting currency of each territory
  • Payments made in line with local legislation
    – The right amount
    – To the right account
    – In the right currency
    – And, always on time
  • Fully reconciled monthly statements provided

5 Questions for a Successful Tax Engine Implementation

A new technology change can be intimidating, but proper preparation can reduce frustration felt by your internal teams as well as reduce friction in your vendor communications. Here are key considerations for your tax engine project.

6 Key Benefits to Sovos’ Integration with Microsoft Dynamics 365 Finance & Operations

As sales tax complexity grows, compliance becomes a greater challenge.

With the growing complexity of global tax compliance, businesses need a system that can handle specific rules and rates across thousands of jurisdictions. Now, you can connect your Microsoft Dynamics 365 Finance & Operations system to Sovos’ Global Tax Determination engine for real-time tax calculation, exempt sales management, return orders management and filing sales tax returns to the appropriate jurisdictions.

infographic

Unquantifiable Costs and Hidden Risks of Government Mandated E-Invoicing

Government mandated e-invoicing contains layers of costs and risks IT leaders need to navigate to remain compliant.

While some risks may seem obvious, what is lurking beneath the surface can cause significant financial and reputational damage to your organization. Find out which costs and risks of government mandated e-invoicing rules are most likely to be problematic for your business, and better prepare your IT organization for success.


See the full infographic below.

What Black Friday and Cyber Monday Trends Mean for Sales Tax

Black Friday and Cyber Monday 2021 didn’t break any records for ecommerce sales, and they actually saw a slight dip in numbers compared to 2020. But even with labor shortages, supply chain issues and a global pandemic, October through December proved to be busy shopping months. With economic nexus in nearly every state, online retailers need to be especially vigilant with sales or use tax collection and remittance responsibilities.

Sovos understands that peak spending periods can happen at any time – not just during the holiday season. That’s why we’ve invested in our products and infrastructure to ensure seamless performance for whenever shopping surges take place. For Black Friday and Cyber Monday 2021, our uptime was 100% with an average response time around 100 milliseconds. Consumer shopping trends may fluctuate, but you need to ensure that your systems are able to accurately and promptly handle those adjustments.

5 Tips for Manufacturers When Navigating Sales and Use Tax

How can manufacturers navigate the ever-evolving and increasingly complex world of sales and use tax? There are several key ways to evaluate your current and future approach to sales tax, maintaining compliance the entire way.

France – Mandatory B2B
e-Invoicing 2024

Faced with a VAT gap of nearly €13 billion, France is introducing mandatory e-invoicing for business-to-business (B2B) transactions from 2024, as well as e-reporting of additional data types. Applying to all companies established or, for e-reporting, VAT-registered in France, this new mandate is complex. It will also require significant planning.

According to the ICC, businesses will need at least 12-18 months to prepare for such continuous transaction control (CTC) mandates so it’s clearly important to start planning now to prepare for the change.

This infographic provides answers to your pressing points surrounding the mandate including:

  • What your company needs to do to comply with the new mandate
  • When your business needs to comply by
  • Other key information surrounding the mandate requirements
  • How Sovos can help

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Mandate aim

The aim of the new mandate is to increase efficiency, cut costs and fight fraud via access to more transaction data. All B2B invoices will need to be transmitted through a central platform. This will be either directly or via registered service providers connected to the platform.

The new mandate will provide the French tax authority with access to all VAT relevant data related to B2C and B2B transactions, so it’s crucial to adjust your business systems and processes to avoid penalties and fines.

France is the latest country to adopt CTCs, as tax authorities across the world look to gain greater insight and close the VAT gap. The proposed requirements come into effect during the years 2024-2026.

France e-invoice and e-reporting rollout dates

July 2024: All companies, irrespective of size, must accept to receive e-invoices under the new rules. The largest 300 companies will be subject to the B2B e-invoice issuance mandate and wider e-reporting mandate. The e-invoicing mandate does not apply to B2C and cross-border invoices. However, there is an obligation to report those transactions so the tax administration has full visibility.  

January 2025: Obligations will apply to a further 8,000 medium-sized companies. 

January 2026: All remaining medium and small companies will be in scope of the mandate. 

How Sovos can help

As France looks set to become the next country in Europe to introduce CTCs with its B2B e-invoicing and e-reporting mandate in 2024, it’s crucial that businesses prepare for and understand their new VAT obligations.

Sovos serves as a true one-stop-shop for managing all e-invoicing compliance obligations in France and across the globe. Sovos uniquely combines local excellence with a seamless, global customer experience.

Our scalable, end-to-end solution ensures e-invoicing and e-reporting compliance in not only France but also 60+ other countries.

Sovos is purpose built for modern tax – an evolving, complex landscape in which global tax authorities are requiring increased visibility and control into business processes, in many cases at the transaction level.

Tax authorities around the globe have embraced digitization to speed up revenue collection and reduce fraud while closing tax gaps. This is the catalyst for companies to move complete, connected and continuous tax compliance software into their digital financial core.

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Spotlight Report

Boost Tax Compliance Capabilities and Visibility with SAP S/4HANA

Is tax a top priority?

As your organization begins SAP S/4HANA migration, is tax compliance a priority? In our latest Spotlight Report, created in partnership with Americas’  SAP Users’ Group (ASUG), “Boost Tax Compliance Capabilities and Visibility with SAP S/4HANA” we make the case for including tax solutions at the very beginning of your planning process. Migrating to S/4HANA can become a big and complicated process for organizations, so it is important to plan accordingly.

Why you need to include tax solutions

In the world of tax, compliance is everything. SAP S/4HANA allows for organizations to view high-level reports and perform in-depth analysis on a line-item level. Increasing visibility is a big deal, and allows for you to identify hardware and software issues before they cause harm. Accounting for tax early in the upgrade process ensures that your organization is prepared for the challenges of modern tax compliance on an international scale. Companies operating on a multi-national scale have a great need for the enhanced visibility and reporting capabilities offered by S/4HANA.

Why tax and IT must work together

Tax process automation is one of the most helpful attributes of S/4HANA, so ensuring that it is set up correctly the first time is critical. Failing to do so is costly and time consuming, so it’s best to get it done the correct way initially. Departments working without automatic processes may find themselves creating manual workarounds, which can lead to compliance risks and painful audits. Instead, focusing on an active relationship between tax and IT allows for the communication of potential impacts due to SAP S/4HANA migration before they happen.  

Why you should talk to Sovos 

Sovos understands that indirect tax compliance is difficult to navigate.This report highlights at which point in the SAP S/4HANA migration process SAP customers are including tax. 

This Spotlight Report presents an overview of how businesses are planning to avoid integration and compliance issues by factoring tax early on in the SAP S/4HANA migration process.

By partnering IT and tax departments, your organization can enjoy complete visibility into complex tax processes. Complete visibility into tax processes and how they connect to SAP systems is a resource that allows companies to have their needs met in both the short and long term.

Download the report now and connect with one of our experts on how to prioritize tax in your integration.

The State of Indirect Tax Compliance Among SAP Customers

Is a Move to the Cloud in Your Future?

Indirect tax compliance can be a behemoth and cause unnecessary strain on IT department resources. Is your company’s digital transformation keeping up with the governments in the locations  you do business? Your tax solutions need to be continuous and automated to adapt the moment regulations change. For multinational organizations, this means around the clock monitoring. In our latest Spotlight Report, created in partnership with Americas’  SAP Users’ Group (ASUG), “The State of Indirect Tax Compliance Among SAP Customers” we explore how SAP customers are planning to modernize their indirect tax operations. 

Indirect tax is an essential financial driver for any organization. It can also be a high-maintenance activity for IT departments. By tapping into the power of the cloud, you can ensure your business is charging, collecting and remitting the proper level of tax, all while dramatically reducing the burden placed on IT. Updating your indirect tax processes is a great way to streamline operations. In this report, we dive deeper into the indirect tax compliance landscape, and break down how SAP customers approach compliance, whether it be on premise or in the cloud.

Why this matters

Organizations are determining that manual processes won’t cut it when it comes to indirect tax. Poor system integrations, slow updates, and compliance issues are holding companies back from staying up to date with the modern ERP landscape. When you’re ready to make the change to the cloud, it’s important to choose a partner with the track record of producing minimal disruption to your business and operations.

Why you should talk to Sovos

Sovos understands that indirect tax compliance is difficult for SAP customers. Keeping up with hardware issues, manual updates and integration issues puts undue pressure on your organization. This report discusses how SAP customers are planning for the future to reduce indirect tax compliance headaches, which in turn helps you garner a better understanding of the current state of the industry. 

This Spotlight Report provides an overview of how businesses are preparing for the continuing ERP evolution. By partnering with a third-party vendor, organizations can more easily overcome SAP-related challenges. And if something does go awry, a third-party vendor can be by your side, providing the support you need when you need it.

Are you ready to modernize your indirect tax operations? Download your complimentary copy of the report now and be sure to connect with our team with any questions you’re left with.

Turkey’s E-Transformation Solutions and Benefits

The journey of e-transformation and tax digitization for companies in Turkey began in 2012 with the e-ledger application being made compulsory for multiple sectors.  

Over the years, the scope of e-transformation has expanded to include different e-documents. Compulsory e-document use was further expanded in terms of both application and taxpayers with the General Communique No. 509 published by the Turkish Revenue Administration (TRA) on October 19, 2019. And so 2020 became the year of e-transformation in Turkey. In 2021, with the effect of various regulations, the number of companies entering the e-transformation process has further increased. 

In addition to the solutions provided to switch companies to compulsory e-document use, e-transformation applications provide many advantages for companies. Benefits include:

E-invoice: 

  • Ability to monitor all your e-invoices (inbound and outbound) in one place (desktop and mobile) via a user-friendly cloud portal. 
  • Remove manual processes and their associated costs such as hardware, ink and delivery, to focus on business-critical tasks.  
  • Complete government integration. 
  • Quick issuing and archiving of e-invoices in digital environment saves time and storage. 
  • Invoices are sent electronically so cannot get lost in transit. 
  • Accelerated collection track and control process. 
  • E-invoice is eco-friendly; printing paper invoice is eliminated. 

E-arşiv invoice: 

  • Reduces printing and shipping costs and completely eliminates archiving costs. 
  • Issuing invoices is faster. Reporting is made easier and more detailed. 
  • All transactional processes are faster, eliminating the operational workload. 
  • Easy and fast access to previous invoices. 
  • Improved security over paper processes as digitally sent and stored. 
  • Improved sustainability due to reduced paper use.  

E-ledger: 

  • Ledgers are stored securely via digital methods. 
  • Provides quick access to accurate data for audit processes. 
  • Reduces cost and time of notarization processes. 
  • Increased compliance with tax processes. 
  • Forms a legal basis for the economy and develops trust in companies. 

E-delivery note: 

  • Reduces paper and document storage costs. 
  • Facilitates waybill track and control and eliminates invoice losses and resubmission. 
  • Enables shorter document delivery times. 
  • Provides quick reconciliation. 
  • Facilitates reporting processes. 
  • Works with e-invoice and e-arşiv invoice processes.

Why Sovos? 

Sovos was built to solve the complexities of the digital transformation of tax with complete, connected offerings for tax determination, continuous transaction control compliance, tax reporting and more.  

Sovos, the world’s leading global software provider protects businesses from the modern tax burden and risk, allows you to concentrate more on your core activities while providing complete future-proof solutions for modern tax compliance with its teams in Europe, North America, and Latin America. 

Contact us

Easier VAT Reporting with Sovos Advanced Periodic Reporting

Periodic VAT reporting takes time. Data must be accurate, its format must be correct, deadlines cannot be missed and additionally the frequency of submissions puts significant pressure on teams responsible for VAT reporting.

Add to these challenges frequent changes in regulation, cross-border complexities and also the fact that no single jurisdiction operates the same, and it’s clear that that your business would benefit from automating and centralising periodic VAT reporting.

This infographic explains how both global and multinational companies can meet their periodic VAT reporting obligations through the power of technology with Sovos Advanced Periodic Reporting (APR).

Sovos APR can help with:

  • Centralising your tax filing and reporting through a single system
  • Improving the quality of VAT returns and declarations
  • Validating data integrity
  • Meeting periodic VAT reporting obligations and deadlines
  • Simplifying how you work with greater visibility and dashboards

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The many benefits of Sovos APR

Lower total cost of VAT compliance

Manual tasks can be automated, processes are easily standardised, and you can also reduce your reliance on outsourcing providers. These advantages, coupled with the ability to lower management costs associated with keeping systems up-to-date, quickly add up.

Greater operational efficiency

Tax professionals need the right resources (both people and tools) at the right time. Sovos APR ensures you can continuously safeguard indirect tax compliance in a way that above all saves time and enhances accuracy. As a result, you can redeploy resources to focus on more strategic deliverables.

Seamless integration with VAT Compliance Solutions Suite

Sovos APR is an integral part of a fully scalable solution suite that addresses all VAT compliance obligations, including e-invoicing and e-archiving. Solve tax for good at a scale that suits your specific business.

What else does Sovos APR offer?

Need more detail on Sovos APR? This infographic dives deep into the solution and also how it helps tax professionals solve their periodic VAT reporting challenges.

This includes:

  • Global outlook – Dedicated reports for a growing number of countries; whilst 60+ countries are monitored for regulatory changes.
  • Universal templates – Additional proprietary reports can also be created to facilitate VAT analysis in 208 jurisdictions, both national and subnational
  • Expert driven – Our pedigree of regulatory research has kept customers compliant for nearly two decades. This knowledge feeds directly into Sovos APR.
  • Always up to date – Full, in-house compliance monitoring and maintenance by the Sovos regulatory team informs how our solution evolves.

Read the infographic now to learn how Sovos APR can:

  • Save you time while providing complete visibility of your filing obligations
  • Build an end-to-end approach that scales with your business
  • Ease the burden of tracking indirect tax regulatory changes
  • Reduce total cost of VAT compliance
  • Enhance decision-making and also maximise operational efficiency

Sovos APR lets you efficiently review everything from a centralised platform. Stay on top of any regulatory changes while remaining compliant both now and in the future.

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A Guide to the E-invoicing Universe in Mexico

What do all the Spanish words and phrases associated with Mexican e-invoicing mean, and what do companies doing business there need to know as they navigate around them? Here is a map to the Mexican e-invoicing universe.

Want to know more? Learn how Sovos has more than a decade of experience helping companies navigate Mexican e-invoicing mandates.

 

Infographic: State 1099 Reporting Deadlines

By far, the biggest challenge facing organizations during 1099 reporting season this year was state reporting. With states tightening deadlines and multiple jurisdictions and reporting thresholds to deal with, Sovos customers found state reporting more complex than any other element of reporting season.

This updated infographic shows why. The map shows 1099 reporting deadlines by earliest deadline per state. In just a few years, the vast majority of 1099 first deadlines have shifted from March to January. Combine that shift with changing thresholds for 1099-K forms and other state-specific policies, and it is clear why state reporting has become such a challenge and will likely continue to be.

 

With reporting periods shrinking, organizations need to centralize and automate reporting processes in order to maximize efficiency, ensure compliance and avoid financial penalties.
Find out how Sovos can help.

Global Taxation is

Going Digital

Here's How to Prepare

An underappreciated revolution--the shift to digital taxation--is underway. More and more countries are requiring businesses to comply with a new model of tax reporting and compliance.

This is the digital transformation of tax: a climate in which global tax authorities demand more e-invoicing and e-reporting—which will likely lead to more e-assessments and e-audits. Here, we explore the transformation and offer a clear path forward for business and technology leaders to tackle its challenges and leverage opportunities.

Section-Dividers-FI-01

To date, about 30 countries have implemented some form of digital tax reporting or collection requirement—and many of those early movers are developing nations such as Brazil and Mexico. As Intra-European Organisation of Tax Administrations Executive Secretary Miguel Silva Pinto explains, a primary motivator moving developing countries toward digital processes is that “digitization is a highly effective means of countering fraud.”

But going forward, more nations—including developed economies—will up the ante on digital reporting requirements. Not only will the information collected swell to include more intimate details around corporate operations, it will also shift from taxpayer-submitted to government-issued returns.

“The rise of digital taxation turns the traditional tax collector-taxpayer relationship on its head,” says Carolyn Bailey, partner at Ernst & Young’s Tax Services. In a Forbes Insights survey of 250+ senior executives, majorities of cross-industry finance, tax and IT leaders report experiencing a variety of trends in digital taxation.

Companies Face New Requirements

80%
of leaders experience
localization
which requires that tax software and reporting processes meet local regulations
64%
of leaders experience
e-Reporting
which replaces manual periodic form filing of summary information to online transmission of files with transaction data
64%
of leaders experience
e-Accounting
which requires businesses to transmit entire accounting ledgers to the tax administration or maintain accounts hosted by the tax administration based on their own transaction data
56%
of leaders experience
e-Invoicing
which mandates the use of e-invoices and real-time submission to the tax administration
Previous
Next
Section-Dividers-FI-02

The switch to digital taxation introduces a variety of challenges, risks and costs: some are immediate and tactical, while others are longer-term and strategic.

The Challenge of Digital Taxation

Transparency

Tax authorities will have a clearer window into a company’s tax operations

Smarter Tools

Advanced analytics and AI will monitor consistency, track compliance and more precisely choose audit targets

Scrutiny

This unprecedented visibility means more intrusive controls, higher income assessments and the potential for tax controversy

Short-term Challenges

Initially, companies will need to tweak or even overhaul their invoicing, payment, enterprise resource planning (ERP) or other financial systems. Challenges will multiply as individual jurisdictions implement and continuously update digital requirements and more nations join the fray.

Meeting multiple requirements on short timelines across a growing list of jurisdictions can lead to a patchwork of solutions amid a diversion of scarce local IT and tax resources. But failure to achieve compliance in real-time reporting of transactions impacting VAT and broader taxation leads to fines, business disruption and damaged reputations.

Long-term Challenges

Digitization of taxation is part of an even larger trend—the shift to sharing more intimate information with tax authorities, a process accelerated by the OECD’s Base Erosion and Profit Shifting initiative (BEPS).

Digitization of so much data “becomes tax disclosure on steroids,” says Bailey. Soon enough, there will be jurisdictions applying advanced analytics and AI to scrutinize enterprises in search of evidence that can be used to levy higher assessments.

“More nations will be collecting massive amounts of information about not only individual companies, but entire industries, giving authorities an unprecedented window into operations and profitability.

Carolyn Bailey

Partner, EY Tax Services
Digital Tax Administration Services

Section-Dividers-FI-03

The path forward can be daunting for business leaders: 57% say that responding to digital taxation represents a significant challenge for their company. Forbes Insights research findings and Bailey’s guidance can help business leaders create an explicit strategy.

Your Transformation Agenda

Take Inventory

“Take inventory of where you’re operating and where these requirements are being introduced,” recommends Bailey. It’s essential “to gain an understanding of the deadlines and to find out about penalties and enforcement.” Inventories should also take into account future investments.

Centralize & Standardize

83% of surveyed executives say they will be taking steps to move global taxation into a more centralized model. Greater centralization will eliminate the need for local IT patches and workarounds, in turn creating “opportunity for companies to achieve greater standardization,” says Bailey.

Streamline

The shift to digital processes—and away from manual, paper-based and often error-prone single-country systems—presents an opportunity to reduce costs while improving quality and efficiency.

Outsource

Executives are seeking assistance from specialists with expertise in digital VAT/GST operations around the world, as well as working more closely with ERP and other financial software providers. Most will be hiring additional IT and tax staff at headquarters and locally.

Collaborate

Perhaps the greatest necessity is to unite leaders across functions and processes. This begins with IT and tax, but also includes the broader finance, operations and strategic planning teams.

Turn Risks Into Opportunity

Synchronize Solutions

A comprehensive response is essential. Many companies need country-specific e-invoicing and related tax solutions, which requires a more systematic approach. And as tax authorities leverage their increased insight, companies must also prepare for more intrusive tax administration controls, tax controversy and intense scrutiny on transfer pricing. A coordinated response linking core business processes and ERP systems with new interfaces and improved solutions for reporting and compliance can significantly reduce costs and risks.

Dig Into Data

Greater standardization of information exchanged with tax administration platforms leads to vast new caches of mineable data. Tools like AI could help sift through detailed cost, revenue and related operational data, leading to more optimal decisions and strategies. Companies can also leverage the same data and tools to proactively scour their business models for tax efficiency and compliance—allowing for improved tax planning, contemporaneous documentation and justification of transfer pricing policies. 

Overall, the trend is clear and unavoidable: taxation is going digital. The best way forward is to use this as an opportunity to improve business outcomes.

Brazil: Electronic Invoicing and Reporting Requirements

In 2008, Brazil adopted a clearance electronic invoicing model in which the country’s tax authority must receive and clear an invoice before a supplier can issue it to a payer. More than a decade later, the Brazilian tax administration’s digitization has evolved so much that other tax administrations call Brazil the Google of fiscal goods. 

Current regulations include electronic invoices for: supplies of goods (NF-e), services (NFS-e), transport services (CT-e), freight (MDF-e), SPED, REINF and, more recently, for the supply of electricity (NF3e). 

This document provides an overview of the mandates and regulations in Brazil.

Mexico: Electronic Invoicing and Reporting Requirements

Mexico is a pioneer in electronic invoicing and VAT enforcement, having begun its digitization journey in 2010. Today, Mexico has one of the most technologically advanced tax administrations in the world. Companies unaware of or unprepared for Mexican e-invoicing mandates could face significant fines and penalties, along with supply-chain disruptions and cash-flow issues. This document provides an overview of mandates and regulations in Mexico.

Growing Pains: Tax Information Reporting Obstacles

Companies operating in the technology space often see rapid growth. However, leaders may be blindsided by multiple Tax Information Reporting obstacles that can cripple their progress.

See the infographic below to learn more.

Cyber Monday 2019 – Sales Tax Preparation Key to Success

Cyber Monday 2019 is anticipated to be one of the most challenging to date for ecommerce and finance teams. More spending, in fewer days, and many more states imposing economic nexus, may subject more online retailers to sales or use tax collection and remittance responsibilities.